Christened the Yatra Fund, it is structured as a closed-end fund with a four-year maturity. The fund will not declare net asset values regularly but may get its art valued by third parties occasionally. After four years, the fund will start selling artists' works and the proceeds will be distributed to investors.
The fund will buy the works directly from artists or through private or online auctions. Buying from art galleries will be the last resort. On maturity, the fund will sell the works, again through auctions or to galleries.
Just like a private equity fund, investors will have to first commit a minimum of Rs 10 lakh in the first round. After six to eight months, when the initial monies are deployed, the next installment will be collected.
"We believe that art as an investment class will do well in this country and we expect the fund to generate returns of around 20 per cent per annum," says Nilesh Shah, executive director, Edelweiss Securities.
Edelweiss has put a trust structure in place, sponsored by three art enthusiasts. It has a team consisting of four persons, all art collectors, with diverse backgrounds -- a venture capitalist, a stock broker and an art entrepreneur.
The fund manager is Geeta Mehra, who runs the Sakshi Art gallery in Mumbai. Shah believes that the supply side for art has matured over the past three decades with an established art history, artists and galleries, while the buyer's side is consolidating after a break-out.
"As an economy globalises, contemporary art grows. Art as an asset has great long-term prospects," says Shah.
